Buying a house can be a daunting process for first-time buyers—so, kick back, relax, and learn from our mistakes.
Congrats—you’re ready to buy a house! Welcome to the world of interior decorating, yard work, and (gulp) real-deal responsibility. These six secrets will help you avoid real estate potholes and cruise into your first abode with confidence.
Face the Paperwork First
There’s nothing worse than stumbling upon your dream home—the perfect house, the perfect yard, the perfect neighborhood—only to watch it sell to a better-prepared buyer. Unfortunately, the home-buying process comes down to a mountain of paper—tax returns, bank statements, W-2s, not to mention home loan and insurance applications. Take time on the front end to gather the required documents and figure out how much house you can afford; seek pre-approval through a reputable lender before you hit the real estate trail. Knowing what you can afford also keeps you from falling in love with homes that are way out of your price range.
Find a Hidden Gem—But Proceed with Caution
Don’t let made-for-TV renovations fool you into believing that whole-house redos are easy, cheap, or speedy. When viewing a home, do look past clutter and unfortunate paint colors to see its potential, but focus first and foremost on discovering any big issues within the home before you buy it. You’ll ultimately need to decide whether or not the home will meet your needs, while also evaluating whether or not you can afford to renovate or repair what’s broken.
Bring Along Someone You Trust
Enlisting the help of a real estate agent is usually a good idea; it’s smart to have an experienced professional negotiating on your behalf. An agent can also help speed up the process if you’re looking to buy a hot property. If you choose to forego the services of an agent, at least take someone along that you trust, like a parent or a friend who has been through the home-buying process before. Make sure they view the house with you at least once (their seasoned eye may see problems you missed), and don’t hesitate to bring them to the closing table, as well.
Watch for Hidden Costs
At this point, you’ve probably already heard about the extra costs associated with buying a home—like closing costs and mortgage escrow fees, for example—but there are also typically some unexpected costs you’ll face, like earnest money payments and loan processing, appraisal, and surveying fees (just to name a few). You may also have to make yearly payments to your neighborhood’s HOA. Be sure you’re including these costs in your budget, so that you’re not hit with any surprises.
Don’t Just Do an Inspection—Do All the Inspections
Inspections are a vital part of the home-buying process, and you need to make sure that they’re included as a contingency in your contract. They’re particularly important if you’re buying an older home, but a home of any age can have hidden issues—even new houses can be poorly built—and a qualified home inspector can spot problems in a hurry. Consider getting more inspections than you need, like plumbing, electrical, structural, pest, and roofing inspections.
Check Out the Neighborhood
Do the neighbors in your community take care of their properties? If you’re buying a condo, what is the ratio of renters to owners? The fact is, you don’t have a lot of control over your neighbors, and you can’t pick up and move your dream house away from apartment buildings, shopping centers, or busy traffic thoroughfares. Do your research so that you can be a happy, enthusiastic, and long-term member of your new spot.